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Uncertain Times? Commercial disputes in 2017

2016 has certainly been a year of political surprises, with Brexit in the UK and Trump in the USA. A quick look at history indicates that such surprises, and the economic consequences that almost inevitably flow from them, tend to have a significant impact on litigation – one needs only look at the jump in issued claims following the 2007/8 recession to see that.

So will we be seeing an increase in disputes in 2017? Of course, the uncertainty around Brexit (regardless of the outcome of the Supreme Court case heard at the beginning of this month) means that there may be greater scope for disagreement between contracting parties going forward. Contracts that were attractive and profitable pre-23 June 2016 may no longer be so post-referendum if, for example, currency exchange rates are no longer favourable, or businesses are hesitant to establish/remain in the UK; and parties may begin to examine more carefully their contractual obligations. Similarly, for those based in, or doing business with, the USA, there are now further uncertainties as to what a Trump presidency holds for the future, and again this may mean that deals and opportunities that were appealing in anticipation of another Democrat presidency are less so in light of what will possibly be the radically different approach of a Republican incumbent.

However, we are looking at a different legal environment now than in the aftermath of the recession. The increase in court fees in 2015 has had a dampening effect on the issue of proceedings in England and Wales, and further substantial increases have not been ruled out. Further, whilst our judiciary remains highly regarded throughout the world, if Brexit means that reciprocal recognition across the EU falls away and enforcement becomes more difficult and/or more expensive, it is possible that the wealthy foreign litigants who have brought their disputes to the UK in recent years will seek alternatives elsewhere. Brexit may also impact the jurisdiction of the UK courts and make litigating here less attractive in the long term. Plainly there are issues to be resolved, and whilst this uncertainty remains we think it likely that parties will choose instead to air their differences in more private fora such as arbitration or adjudication. Recent years have also seen the overstretched UK courts (particularly the Court of Appeal) issue a fairly forceful push towards alternative dispute resolution methods, such as mediation, and we do not see the courts' enthusiasm waning in this regard in 2017 and beyond.

In the commercial world, therefore, whilst we think it likely that the upheaval of 2016 will mean greater numbers of disputes, we think fewer will be resolved through traditional court litigation and that there will be a rise in the use of arbitration and other ADR processes. Catherine Gilbert's article showcased the success of the construction adjudication scheme over the last 20 years, and we think that there is potential for adjudication to take on an exciting new role in other areas in the coming years. An excellent example is the launch this year of the Professional Negligence Adjudication scheme, and we anticipate similar success stories amongst other non-traditional dispute resolution options going forward.

Where we will, most likely, see an increase in activity is in the regulatory arena. Brexit may, or may not, produce a "bonfire of the regulations", but either way it is unlikely to put a halt to the focus on regulation and compliance that has been so strongly evidenced in recent years. Across the board, from the FCA to the SFO to the SRA, regulators have been increasingly active since the recession, and we anticipate that this activity will only grow in the coming years. As Tom Webb said, in the first of these Festive Forecasts, we expect further use of the Bribery Act next year, as well as increased activity by the SFO, for whom privilege remains a key battleground. In the food sector, Sian Edmunds highlighted the early successes of the Groceries Code and its adjudicator, whose remit may now expand with a consequent increase in impact and influence. Public procurement, another very heavily regulated sector, is also likely to continue to produce high levels of court activity, as Chris Jackson and Ian Tucker have highlighted in their article what's on the horizon for public procurement?.

Finally, although we do not anticipate any major leaps forward in 2017, looking into the medium-long term, it is increasingly clear that it is technological developments which will revolutionise modern litigation. Whether we are talking about Online Courts, Artificial Intelligence with the ability to analyse cases and predict litigation outcomes, or apps and bots which can provide automated advice in niche areas, technology is the future and we must all learn to embrace it.

It will be apparent, from our articles over the last month, that there are interesting times ahead. If you have need of expert litigation advice, our team of 70 lawyers specialises in running and resolving high value, complex cases in the UK and internationally, and is ideally placed to offer the best mix of advice, service and value.

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